Pakistani rupee weakens sharply in likely devaluation by c.bank

In this file photo, Money dealers count Pakistani rupees, right, and US dollars at a currency exchange in Islamabad on March 12, 2014. (AFP)
Updated 20 March 2018
0

Pakistani rupee weakens sharply in likely devaluation by c.bank

ISLAMABAD: Pakistan’s rupee weakened sharply against the dollar on Tuesday in what appeared to be a currency devaluation by the central bank, traders said, the second such intervention in the last three months.
The rupee plunged to about 115.5 per dollar in early trading from 110.5 at Monday’s close, traders said. Abid Qamar, spokesman for the State Bank of Pakistan (SBP), told Reuters the rupee plunge was a “market driven” event.
However, foreign exchange traders say the central bank’s withdrawal of support for the rupee in daily market operations on Tuesday sent the currency lower.
The SBP devalued the local currency in a similar manner by about 5 percent in December amid balance of payments pressures due to a widening current account deficit and dwindling foreign reserves. The market was broadly expecting another devaluation this year.
“Apparently the central bank withdrew support,” Fawad Khan, head of research at BMA Capital, told Reuters on Tuesday.
Withdrawal of support would have the effect of devaluing the currency as the SBP is the most influential player in the thinly-traded local foreign exchange market and controls what is widely considered a managed float system.
In response to Reuters’ queries about the rupee’s decline on Tuesday, the central bank’s Qamar said it was triggered by “some payment pressures which are building within the market” and added that the central bank would be “observing the market where it is moving toward.”
Pakistan’s economy has been growing at above 5 percent, the fastest pace in a decade, but a surge in imports has widened its current account deficit and prompted analysts to suggest the country may need an International Monetary Fund (IMF) bailout in the coming 12 months.
“We believe this is much needed as Pakistan’s external account has deteriorated as of late,” the Topline Securities brokerage said in a flash note to clients on Tuesday morning after the rupee weakened.


Trump threatens tariffs on all $505 billion of Chinese imports

Updated 20 July 2018
0

Trump threatens tariffs on all $505 billion of Chinese imports

WASHINGTON: US President Donald Trump said in an interview released Friday he is willing to hit all Chinese goods imported to the US with tariffs if necessary.
“I’m ready to go 500,” the Republican leader told the US network CNBC, referring to the $505.5 billion in Chinese imports accepted into the US in 2017.
“I’m not doing this for politics, I’m doing this to do the right thing for our country,” Trump said.
“We’ve been ripped off by China for a long time,” he added.
After weeks of apparently fruitless negotiations, the US early this month imposed 25 percent tariffs on approximately $34 billion of Chinese mechanical and technological products — sparking an immediate response from Beijing, which said it would hit back dollar for dollar.
China accused the US of starting the “largest trade war in economic history.”
A second tranche of $16 billion in products is under review and could soon be added to the US measures.
In the full interview released Friday Trump reiterated his claim that the US is “being taken advantage of” on issues including trade policy.
“I don’t want them to be scared. I want them to do well,” the US president said of China. “I really like President Xi a lot. But it was very unfair.”
The US-China spat is the largest and broadest of several trade fights picked by Trump.
The growing share of international trade under threat has raised the prospect the escalating trade war could harm the global economy by disrupting companies supply chains, pushing firms to hold off on investments and making goods more expensive for consumers.
In excerpts of the interview released on Thursday Trump had broken with the long-established executive branch practice of not commenting on the Federal Reserve’s decisions out of respect for its independence.
“I’m not thrilled,” Trump told the network in an interview excerpt aired Thursday. “Because we go up and every time you go up they want to raise rates again.”